‘A great win for all’

Scotiabank is not pulling out of the region, TT managing director Stephen Bagnarol insisted yesterday.

Instead, it has decided to focus on its core markets, where they have “size and scale.”

Bagnarol also insisted that there would be a smooth transition from Scotiabank to Republic Bank, so long as all regulatory approvals are given, a process he said could take up to six months.

“We value our customers and employees a lot. We decided to partner with Republic because they wanted the talent and they expressed a desire to grow. It’s a great win in these countries,” Bagnarol told reporters yesterday at a briefing at the bank’s TT head office on Park Street, Port of Spain. Republic was a “first rate institution,” he said, and the right partner because they share the same core values.

On Tuesday, Republic and Scotiabank announced a surprise deal where the former would acquire the latter’s holdings in the Eastern Caribbean, Guyana and St Maarten for US$123 million. The deal was not welcomed by at least two governments—Guyana and Antigua and Barbuda. The Antiguan government said the parties did not ask for permission, while the Guyana finance ministry said the transaction “raises concerns and is regretted.”

“I cannot comment on speculation about what could or couldn’t happen. What I will say is we will work with all the regulators in each of the counties. We do believe this is the right thing for Scotiabank, Republic, and their staff and clients,” Bagnarol said.

Republic’s managing director Nigel Baptiste also attempted to assuage concerns, especially in Guyana, where the finance ministry feared the bank’s massive presence would influence market forces, since Republic’s share would grow from about 35 per cent to 51 per cent. “We believe that while the market share itself appears large if you disaggregate that market share and look at with respect to the various business sectors, government and private individuals, the picture would vary substantially. As such, we remain hopeful, if not confident, that once all of the issues are ventilated and addressed, there will be considerably less angst in the markets,” he said.

Baptiste also compared the difference of Scotiabank’s size and scale and Republic’s. “Scotia’s global asset base is US$752 billion, their annual revenue is US$21.85 billion and their annual profit is US$6.7 billion. Republic’s asset base is US$10.5 billion, our annual revenue is US$750 million and our annual profit is US$198 million. The scale of the two operations is therefore considerably different. US$2.5 billion in assets is 20 per cent of our total but less than 0.2 per cent of their total. We could do exactly the same thing that they do and the impact for us would be far greater than it would be for them,” he said.

Despite the scale-down, Bagnarol said Scotiabank was committed to the region and will still be present in 90 per cent of the region, serving 1.5 million clients with a 7,700-strong staff. For the overall group, he said, the Caribbean contributed US$600 million to the bottom line. The focus now, he said, will be focusing on larger-scale markets, and using resources to enhance service delivery to customers, through new products like digital branches and next-generation ATMs.